Quote from: Elwar on January 06, 2015, 02:27:59 PM

Do you know the concept of bubbles?

Like this one:

https://i.imgur.com/hKrWuKu.png

Sure I do. I know that tulips were a bubble, along with many other things. I also know that for a bubble to exist market prices have to reach a level where they cannot deliver the expected results. If you are saying that US debt is in a bubble, I would point you to my other posts and suggest that you have not read them. It is not a bubble as long as they can pay the interest expense on their debt ie deliver the PROMISED payments. The US can never not pay on its debt obligations. Period. The rest of the WORLD disagrees with you that is why UST rates are at multi-decade lows. If you understand that the US Treasury can CONTROL the interest rate they pay on debt by issuing only 1 year UST or that the FED can target 1% as the 30yr UST rate then you see that paying interest on debt can never sink a country that can issue its own currency and has no foreign-denominated debt. It is not something that you can argue it is a fact about how our financial system works.

I'm not going to get bogged down by the misleading chart you posted for 2 reasons. 1) you are ignoring output and the value of assets that the country has. Having a lot of debt does not matter if you are using that debt to produce more, which the US has been. There are also hidden assets like oil, gold, etc that don't show up there. It is extremely misleading and offensive to people reading this to post a chart of debt increasing because 1) it ignores that the US economy is much better off than it was 40 years ago and 2) you are assuming this false notion that debt somehow has to get paid down one day. It does NOT. If you paid down all the USTs in the world, think about how much savings people would lose! Everyone who holds UST today collects interest from that debt - it is an ASSET for people. No way no how will it ever disappear from the planet nor does it have to! We pay our obligations, issue debt to produce more and life goes on because we can TAX that new output which was created by the debt.

Lastly, your chart has an entire gray area which is not based on fact, it is just scribbles saying that somehow, something happens that makes it all go bad. There are no facts there there is nothing but a guess. I'm just going to ignore the fact that the implications of your chart and notes would be that debt gets somehow paid down and that is a good thing or a "crash"... the notes you have apply to business and product cycles, not government debt.

I can post a chart of the SP500 that goes straight up at a 45 degree angle like your chart - is that a bad thing too? The chart is meaningless, please don't insult the intelligence of the people on these boards and try to scare them with something that misleading.